Consumer data sold through “trigger lists”

Ever notice how when you apply for a home loan, you suddenly start getting emails, phone calls and letters with unsolicited competing loan offers? The most disturbing part of it is how much personal and financial data they seem to have on you.

Here’s how “trigger lists” works: When you apply for a mortgage, your loan officer or mortgage broker pulls up your credit report from one of the three credit bureaus, TransUnion, Equifax and Experian. That inquiry tells the bureaus that you’re in the market for a loan. The credit bureaus then sell lists of the data — which contains personal and financial information — to other lenders and third parties who inundate you with offers.

The FTC has been under fire for giving the nation’s three credit bureaus “too much latitude to profit from the sale of credit data to lenders and consumers,” according to this story today in USA Today.

While some argue that the competing offers give consumer choice, critics worry that it exposes consumers to identity theft and bait-and-switch schemes.